The government will give Rs. 5,000 crore to Air India (AI) in 2013-14 as part of its bailout package for the national carrier. The aviation ministry had asked for Rs. 8,500 crore. At the same time, the government has moved to encourage aircraft maintenance as an industry in India.
As per the turnaround plan cleared by the cabinet, government will infuse Rs. 30,000 crore into AI by 2020. The national carrier would have to raise Rs. 1,318 crore during the year on its own.
The outlay for civil aviation ministry is Rs. 8,865.4 crore in 2013-14. Rs. 2,260 crore has been allotted to Airports Authority of India.
Aviation industry experts said they were disappointed with the budget. "We hoped the Centre would have looked at addressing some key critical issues of the aviation industry," said Ankur Bhatia executive director, Bird Group.
"The aircraft manufacture, repair and overhaul (MRO) industry is at a nascent stage. Encouraging the MRO sector will generate employment besides other benefits. Hence, I propose to provide certain concessions to the MRO industry," the FM said in his budget speech.
The time period for installation of parts and testing equipment imported for MRO of aircraft by units engaged in such activities is being extended from three months to one year. At present, basic customs duty exemption is available to parts and testing equipment for MRO of aircraft, and is now being extended to parts and testing equipment for MRO of aircraft and parts.
The duty-free allowance of airline crew member has been raised from Rs. 600 to Rs. 1,500.